Unintended consequences? Section 96 and alternative dispute resolution

by Olga Redko
Student-at-law
Irving Mitchell Kalichman LLP

In its recent decision Trial Lawyers Association of British Columbia v. British Columbia (Attorney General) (2014 SCC 59), the Supreme Court ruled that British Columbia’s statutory scheme of court fees is unconstitutional. Interestingly, the majority in this judgment based its conclusions on an arguably novel, expansive interpretation of section 96 of the Constitution Act, 1867.

 

The facts of the case are fairly straightforward. A plaintiff in a custody dispute was required to pay $3,600.00 in hearing fees for a 10 day trial under British Columbia’s Supreme Court Rules. She could not afford the hearing fee after her savings had been depleted by the other legal fees she had already paid in the case, but she did not fall within the fee exemption for “indigent” persons provided for in the Rules.

 

Writing for the majority, Chief Justice McLachlin held that the hearing fee scheme set out in the Rules was unconstitutional. She did not base her reasons on any individual right of access to justice found in the Charter, but instead took the position that hearing fees were unconstitutional to the extent that they impinged on the original jurisdiction of superior courts guaranteed by section 96 of the Constitution Act, 1867.

 

While acknowledging that the provinces may pass legislation imposing court hearing fees by virtue of their jurisdiction over the administration of justice (s. 92(14) of the CA, 1867), the Chief Justice cautioned that:

[27] … in determining the power conferred on the province over the administration of justice, including the imposition of hearing fees, by s. 92(14), the Court must consider not only the written words of that provision, but how a particular interpretation fits with other constitutional powers and the assumptions that underlie the text.  

[28] In this case, the other constitutional grant of power that must be considered is s. 96 of the Constitution Act, 1867, which has been held to guarantee the core jurisdiction of provincial superior courts throughout the country.

The question was, then, “whether legislating hearing fees that prevent people from accessing the courts infringes on the core jurisdiction of the superior courts” (para 31). The Chief Justice found that, indeed, this was the effect of the hearing fees in some contexts:

[35] Here, the legislation at issue bars access to the superior courts in yet another way ― by imposing hearing fees that prevent some individuals from having their private and public law disputes resolved by the courts of superior jurisdiction ― the hallmark of what superior courts exist to do. As in MacMillan Bloedel, a segment of society is effectively denied the ability to bring their matter before the superior court.  

[36] It follows that the province’s power to impose hearing fees cannot deny people the right to have their disputes resolved in the superior courts. To do so would be to impermissibly impinge on s. 96 of the Constitution Act, 1867. Rather, the province’s powers under s. 92(14) must be exercised in a manner that is consistent with the right of individuals to bring their cases to the superior courts and have them resolved there.

Furthermore, the Chief Justice noted that “[w]hile this suffices to resolve the fundamental issue of principle in this appeal, the connection between s. 96 and access to justice is further supported by considerations relating to the rule of law” (para 38). Relying on precedent, including the Court’s recent decision in Hryniak v. Maudlin (2014 SCC 7), she established that access to courts is critical for the maintenance of rule of law:

[40] In the context of legislation which effectively denies people the right to take their cases to court, concerns about the maintenance of the rule of law are not abstract or theoretical. If people cannot challenge government actions in court, individuals cannot hold the state to account ― the government will be, or be seen to be, above the law. If people cannot bring legitimate issues to court, the creation and maintenance of positive laws will be hampered, as laws will not be given effect. And the balance between the state’s power to make and enforce laws and the courts’ responsibility to rule on citizen challenges to them may be skewed (citations omitted).

This majority opinion was joined by a concurrence by Justice Cromwell, who preferred to resolve the case on administrative rather than constitutional grounds, as well as a stinging dissent by Justice Rothstein, who vociferously criticized what he perceived to be the majority’s overly expansive and unprecedented interpretation of section 96.

 

Many aspects of the decision quickly drew commentary from the blawgosphere, with commentators weighing in on the validity of majority’s and dissent’s competing conceptions of section 96 and the rule of law principle; critiquing Justice Cromwell’s concurring reasons; and posing the more fundamental question of whether the immediate effect of Court’s decision on hearing fees will actually improve access to justice.

 

However, there has been little discussion of the potential impact of the majority’s reasoning on other areas of provincial legislation in the sphere of administration of justice. In particular, the majority’s opinion raises the concerning possibility that the Court’s new reading of section 96 in conjunction with the rule of law principle may be used to undermine existing provincial authority over access to alternative dispute resolution, and private international law more generally.

 

For example, in setting out the circumstances in which Quebec courts have jurisdiction over a dispute, Quebec legislators have explicitly recognized the right of parties to agree to submit present or future disputes to resolution by a foreign authority or an arbitrator (article 3148 CCQ, in fine). The Supreme Court has moreover underscored the importance of respecting parties’ autonomy to select a mutually agreeable forum under article 3148 in GreCon Dimter inc. c. JR Normand inc. (2005 SCC 46).

 

Yet with the Court’s decision in Trial Lawyers Association, the settled nature of these principles may be cast into doubt. Contractual clauses sending parties to binding arbitration, or designating other provincial or state courts to resolve the dispute, clearly have the effect of denying a party the right to bring a case before the Quebec Superior Court. They arguably lead to the same result with which the Court is so concerned in Trial Lawyers Association, namely hampering the creation, maintenance, and interpretation of positive laws within the province. After all, an arbitral agreement might provide for no mechanism to control the correctness of an arbitrator’s interpretation of an applicable legal framework. Equally, a forum selection clause that directs litigants to go before a court in the United States (even if the applicable law is that of Quebec) eliminates Quebec superior courts’ ability to develop the provincial civil law and provide for its uniform application. After Trial Lawyers Association, it is arguable that such limitations are impermissible infringements on the Quebec superior court’s inherent jurisdiction, and that they are inconsistent with the constitutional rule of law principle.

 

A slightly different effect might arise if we consider article 3149 CCQ, which provides an example of legislative intent to limit the voluntary waiver of Quebec courts’ jurisdiction by preventing the setup of such clauses against parties to consumer or employment contracts. In Dell Computer Corp. c. Union des consommateurs (2007 SCC 34), a majority of the Supreme Court ruled that 3149 CCQ did not apply to consumer arbitration agreements. Although legislators later amended Quebec’s Consumer Protection Act to extend safeguards against arbitration clauses to consumers in the way that article 3149 did not, the Supreme Court’s decision in Dell underscores respect for legislators’ decision to limit the circumstances in which courts may override parties’ express intentions.

 

However, since the more expansive reading of section 96 could undermine this restrained approach to overturning choice of forum clauses, it could equally have the effect of rendering the legislator’s express limitations on judicial discretion moot.

 

These potential implications of the Trial Lawyers Association ruling are all the more troubling because the majority’s expansive interpretation of section 96 could only be given effect when faced with state action. In Quebec, recognition of the validity of forum selection and arbitration clauses (and the limits to this recognition) are established by the Civil Code. Likewise, some legislation in the common law provinces (British Columbia’s Court Jurisdiction and Proceedings Transfer Act, for instance) dictates circumstances in which courts may give effect to forum selection agreements. Yet for provinces which lack such legislation, the validity of contractual forum selection and arbitration clauses is governed by the common law.

 

These differences in the source of private international law rules had not previously posed any substantial problems, but now Trial Lawyers Association has raised the question whether the legality—indeed, the constitutionality—of enforcing forum selection or arbitration clauses differs from province to province, depending on whether doing so is required by statute or not.

 

Such potential outcomes are moreover disconcerting when we consider that giving effect to forum selection clauses and promoting recourse to alternative dispute resolution methods are commonly seen as ways of improving litigants’ access to justice by providing certainty and greater efficiency in the litigation process, as well as lessening the resource burden on courts. Indeed, article 1 Quebec’s new Code of Civil Procedure explicitly directs parties to seek private mechanisms of dispute resolution prior to instituting an action in court.

 

However, as Justice Rothstein pointed out in his dissent, there is no internal constitutional mechanism to balance a restraint of superior courts’ jurisdiction against legitimate economic and efficiency-related reasons for limiting access to these courts. As a result, in theory courts applying the rule out of Trial Lawyers Association would not be able to take account of legislators’ desire to increase recourse to alternative methods of dispute resolution, even if such recourse would improve the operation of the superior courts for litigants who remained to use those courts’ services. It would be deeply ironic, then, if a landmark case on access to justice actually opened the door to more inefficiency and lag time in the court process by limiting individuals’ access to different means of resolving their disagreements.

 

The present list of possible consequences of this broadened reading of section 96 is hardly exhaustive: one can imagine prescription periods, for instance, giving rise to the same question of whether superior courts’ jurisdiction is impermissibly trenched upon because an individual cannot bring a particular dispute to court; other examples surely exist. We must hope that, in light of the problems presented by such an expansive view of superior courts’ inherent jurisdiction, in future cases the Supreme Court will be very careful in broadening its interpretation of what constitutes an infringement of section 96.

 

Reference : [2014] ABD 425